Coronavirus & Its Impact On Financial Market

The recent outbreak of the Coronavirus (CoV) had spiraled concerns from all around the world, affecting people’s daily routine globally. The CoV spread from Wuhan, China, as of now, had infected more than 28,299 people across 25 countries, taking the lives of up to 565 people, as per today report on the virus uodate. The outbreak of the deadly virus epidemic had since jeopardized businesses, with concerns spiraling around the world. 

Besides being a threat to human lives, the CoV also inflicted significant impacts onto financial markets; China stock indices were plunging, safe-haven assets gaining, and latest effect seen is the hike in the price of entertainment company stocks due to the higher demand as people now starting to refrain from having any activities outdoors.

One other significant impact can be seen in the crude oil market, which plummeted more than 15% from close to $60 per barrel back towards $50 per barrel since the outbreak of CoV. The explanation behind the fall in oil prices is mainly due to concerns over the significant drop in global oil demand, despite OPEC+ efforts to deepen their production cut. 

As several businesses are now ordering their workers to work from home, many operations such as manufacturing and transporting, which consumes a large amount of crude oil are now being ceased until further notice. Expectations of already worsening global demand now further gave oil bears more reasons to sell the black commodity. 

However, concerns are easing recently, with investors taking profit from their investment parked in safe-haven assets during the outbreak of the CoV, causing the recent fall in safe-haven assets and further hike in stock prices as market risk appetite gradually increases. Even so, the CoV remains a global threat, with countries around the world putting effort in combating the virus and prevent further deaths. 

If the virus persists, schools and businesses will be forced to shut down, affecting not only the lives of people but also the entire system of our everyday lives. We urge people around the world to take precautions in this drastic situation, refrain from having outdoor activities, and stay tidy and healthy.

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